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Rand tumbles to 6-month low

JOHANNESBURG. — South Africa’s rand slumped more than 2 percent to a near six-month low against the dollar and government bonds weakened sharply on Friday, dragged down by weak economic growth and investors shying away from riskier assets.

The rand traded at 13.2400 per dollar, 1,7 percent weaker than its close on Thursday, after earlier falling more than 2 percent to session low of 13.2875. The currency was at its weakest level against the dollar since December 18, extending losses suffered in the previous session. The yield for the benchmark government bond due in 2026 rose 21 basis points to 9,04 percent, its weakest since December. Wider appetite among investors for riskier assets has waned on bets that Europe’s massive monetary stimulus is nearing an end, compounded by uncertainty over trade relations ahead of a key meeting of global leaders.

Analysts said the local unit suffered the most as sentiment was also hurt by concerns over the economy.
“Although there was broad-based weakness in EM, the rand was one of the worst-performing currencies, as peers raised interest rates and concerns around SA’s current account deficit grow,” Rand Merchant Bank economist Mpho Tsebe said in a note. — Reuters.

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